Bloomberg News

Mexichem CEO Says Company Is Set to Beat 2011 Earnings Goal

June 01, 2011

(Updates with recent investments in Asia in seventh paragraph, stock price in final paragraph.)

June 1 (Bloomberg) -- Mexichem SAB, the largest maker of plastic pipes in Latin America, expects to beat its forecast for earnings this year amid growing demand for fluoride and expanded operations in Asia, the chief executive officer said.

“We’re going to get over $800” million in earnings before interest, taxes, depreciation and amortization, known as Ebitda, Rafael Davalos said today in an interview. The company had estimated earnings on that basis of $780 million this year.

“We have the certainty that we’ll top that estimate,” he said today from company headquarters in Tlalnepantla, Mexico.

Mexichem is expanding operations in Japan and South Korea as it sees growing demand for chemicals used in refrigerants, lubricants and propellants. The Mexican chemical company became the world’s largest producer of calcium fluoride, a refrigerant component, after the $350 million acquisition of producer Ineos Fluor from Ineos Group Holdings in March.

At the time of the acquisition, Ineos Fluor employed 350 workers in operations in Europe, the U.S., Japan and China. It supplies chemicals and fluorinated feedstock for refrigerants, medical inhalants and coatings for cookware and aerospace.

The Mexican company has acquired a dozen companies in the past three years, according to data compiled by Bloomberg.

Mexichem said May 9 that it will invest more than $150 million in Japan and South Korea to reduce “dependence” on Chinese supplies over the next year.

The shares climbed 0.5 percent to 42.4 pesos in Mexico City trading at 3:24 p.m. New York time. Mexichem is the sixth best performer in the 37-member Mexican Bolsa benchmark index, which has dropped 0.9 percent.

--Editors: Robin Saponar, Dale Crofts

To contact the reporter on this story: Carlos M. Rodriguez in Mexico City at carlosmr@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net.


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